Consultant recommends sharp increase in Muskoka development charges

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By Kristen Frisa

Ontario Construction News staff writer

A consultant hired by the District of Muskoka to conduct a mandatory review of the region’s development charges has recommended a sharp increase in the fees.

Hemson Consulting says higher development charges are required order to cover the true capital costs new builds will incur. Development charges are levelled at building projects to help fund servicing required for the new buildings, like water, drainage, roads, and sidewalks.

“The principle is ‘growth pays for growth.’ so that financial burden is not borne by existing tax/rate payers,” Hemson’s presentation to council reads.

Hemson argues that since 2014 council was keeping the prices artificially low in order to spur more development, by charging for only 50 per cent of calculated engineered services mentioned above, and none at all for more general services like policing, administration, ambulance, and social services that rack up with new residents in an area. Hemson says the fees are not sustainable at current levels. It argues when development charges are low the costs have to be passed along in property taxes or utility fees.

Hemson is recommending that charges jump from roughly $9,900 to $26,700 per single-detached, semi-detached and duplex unit on municipal services, while rates per unit not on municipal services would rise from roughly $3,600 to $9,800.

“Council has a range of implementation options,” the presentation reads, “implement rates for only some services; implement reduced rates; phase-in rate increases over a period of time; some combination of the above.”

Critics argue that the move, if adopted, would make it more difficult to find housing in the area, which has already been an issue because of high demand and high prices.

“Is the plan to just keep inflating it to ridiculous proportions until the ultimate irony occurs – when development grinds to a halt in Muskoka due to development charges?” asked area resident Joe Stratford in an email sent to council on April 1. “The consultant’s tally pretty well represents the final coffin nail to The Canadian Dream of new home ownership and/or the possibility of building one’s own dream home, no matter how modest,” it reads.

“This further discourages the small pool of developers willing to take a risk in this space from building ‘affordable’ units,” said a statement to council from Kris House of HLD Muskoka, a home and cottage builder based out of Huntsville.

Council continues its development charges debate at a special meeting slated for May 21. The District must pass a new bylaw before expiry in order to continue collecting development charges. The byaw expires on July 14, 2019.

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